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Gala2k [10]
3 years ago
6

A stock with a current market price of $50 and a strike price of $45 has an associated put option priced at $3.50. This put has

an intrinsic value of ______ and a time value of _____.
PLEASE SHOW ALL STEPS, THANK YOU!

A.) $5; $3.50
B.) $3.50; $5
C.) $3.50; $0
D.) $0; $3.50
Business
1 answer:
Rashid [163]3 years ago
6 0

Answer:

The answer is D

Explanation:

Intrinsic value can be found by simply using the following formula

Put intrinsic value = Strike Price - Current selling price

this gives,

PIV = $45 - $50 = $-5

A put intrinsic value cannot be vegetative as it can be exercised right now at the current price. Thus it is interpreted as 0.

Time value is calculated as follows

Time Value = Option Price - Intrinsic Value

This gives   TV = $3.5 - $0 = $3.5

Hope this helps.

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5. Fixed expenses - e. Expenditures that are constant from one time period to another

6. Discretionary spending  - b. Expenditures that are under your control

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4 0
3 years ago
Watson consulting, llc is a consultancy to consultants. They have bonds which have a face value of $1,000. The bonds carry a 3.5
Montano1993 [528]

Answer:

The current market price is $ 883.08  

Explanation:

The current market price can be ascertained using the pv excel function as follows:

=-pv(rate,nper,pmt,fv)

rate is the semiannual yield to maturity which is 5%/2

nper is the number of semiannual coupons in the bond i.e 10*2=20

pmt is the semiannual coupon=3.5%*1/2*$1000=$17.5

fv is the face value of the bond

=-pv(5%/2,20,17.5,1000)=$ 883.08  

3 0
3 years ago
A project to build a new bridge seems to be going very well since the project is well ahead of schedule and costs seem to be run
tresset_1 [31]

Answer:

Schedule variance = $1,428,140

Schedule Performance Index (SPI) = 1.132

Cost Performance Index = 0.801

Explanation:

Planned Value = $1,414,000 + $10,494,000 + $8,494,000 * 53%

                        = $20,402,000 * 53%

                        = $10,813,060

Earned Value = $1,414,000 + $10,494,000 + $8,494,000 * 60%

                        = $20,402,000 * 60%

                        = $12,241,200

Schedule Variance = Earned value - Planned value

                                = $12,241,200 - $10,813,060

                                = $1,428,140

Schedule Performance Index (SPI)

                          = Earned value / Planned value

                          = $12,241,200 / $10,813,060

                          = 1.132

Actual Cost (AC)

                        = $1,294,000 + $8,994,000 + $4,994,000

                        = $15,282,000

Cost Performance Index (CPI)

                             = Earned value / Actual cost

                             = $12,241,200 / $15,282,000

                             = 0.801

3 0
3 years ago
When Disney relied on licensing agreements with the Oriental Land Company to open its first foreign theme park, Tokyo Disneyland
Phantasy [73]

Answer:

Letter A is correct. <u>Its licensing partner, the Oriental Land Company reaped the windfall, because the partner who bore the risk was also likely to be the biggest beneficiary from any upside gain. </u>

Explanation:

When analyzing the other Disneylandia around the world, we can see a different case in Tokyo Disneylandia, which is the first in the world that does not belong entirely to Disney. Upon being opened under a license agreement in Tokyo, Disney receives only a royalty fee, and Oriental Land Company receives a substantially favorable profit from the existing value of the Disney brand in the world, and from its stable and well-structured operations model .

So in this license agreement, Disney controls the creative part of the business, and the Oriental Land Company operates the business, which means that there are profitable advantages for both companies.

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Alik [6]

D is the answer to this question. Hope this helps.

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